Coronavirus Flash Update June 1, 2020

Coronavirus Flash Update: June 1, 2020

Alston & Bird’s Coronavirus Flash provides updates on policy and regulatory actions under consideration across many important industries being monitored by our teams. Links to key government and legal resources are provided throughout the report.

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UPDATED 9:00 AM ET ON MONDAY, JUNE 1, 2020

The Latest News

  • U.S. COVID-19 cases exceed 1,783,919 and 103,191 U.S. deaths. (Source: CDC) (Updated 6/1/20)
  • U.S. stock market: On Friday, the U.S. benchmarks posted mixed results, with the Dow dropping slightly at 17 points, and the S&P 500 and Nasdaq posting gains at 14 and 120 points, respectively. (New)
  • Last Friday, President Trump announced he would halt funding for and withdraw U.S. membership in the World Trade Organization, stating during a Rose Garden ceremony that “We will be today terminating our relationship with the World Health Organization and redirecting those funds to other worldwide and deserving urgent global public health needs…The world needs answers from China on the virus.” (New)
  • The Kaiser Family Foundation estimates that 8 million people have lost their job-based health care coverage as of May 1 in a new analysis. The U.S. Chamber of Commerce and a broad coalition of business and health care groups wrote to Congressional leadership several weeks ago to urge several steps to extend health care coverage for those losing it with their loss of jobs and the letter includes a push for Congress to offset the full cost of COBRA to former employees through a direct subsidy for the coverage. (New)
  • UnitedHealthcare has announced it was waiving cost-sharing for COVID-19 treatment through July 24, 2020 for Medicare Advantage, Medicaid, Individual and Group Market fully insured health plans, extending treatment coverage with no cost-sharing which had been set to expire on June 1. Blue Cross Blue Shield Association has indicated that many of its affiliated plans would also continue to waive cost-sharing for tests and treatment through July 24 and Anthem, an affiliated member, plans to waive cost-sharing for testing and treatment through the end of the year. Congress required most insurers to cover testing but decisions on whether to cover COVID-19 treatment and waive patient cost-sharing has varied from health plan to health plan. The American Health Insurance Plan Association maintains a webpage with summaries of COVID-19 testing and treatment policies. (New)

COVID-19 Federal & State Legislation   

  • Bill 4.0: The House is out this week, but the Senate returns and plans to continue work on a proposal to extend liability protections for COVID-19 related litigation against businesses. The details remain in flux and the proposal’s protections may expand as some Senators have voiced support for liability protections for colleges and health care providers as well. (New)
  • Surprise billing is another possible relief bill issue gaining attention when details were published that the President has signaled his support for a ban on surprise billing in bill 4.0. The CARES Act Provider Relief Fund payment terms and conditions prohibit surprise billing for COVID-19 related treatment, but the current discussion underway between the Administration and congressional leaders appears to seek an outright ban on surprise billing for all out-of-network care. Throughout last year several competing approaches had sought a pathway to passage and all these proposals coupled additional rate restrictions with the ban on surprise billing, mostly on hospitals and other providers. The other requirements, like setting a benchmark rate for out of network care, were controversial while the idea of a simple ban on surprise billing is generally supported by many of the stakeholder groups. (New)
  • For the full details on the HEROES Act, H.R. 6800, which passed the House on May 15:
  • Bill 3.5: Paycheck Protection Program and Health Care Enhancement Act, (R. 266) was enacted on April 24. Also available are a section-by-section summary and an overview of the health care provisions.
  • A&B detailed summaries are below:
    • A&B Summary – 5 Small Business Provisions
    • A&B Summary – 5 Health Care Enhancement Provisions
  • Bill 3.0: Coronavirus Aid, Relief, and Economic Security (CARES) Act, (R. 748) passed on March 27. A congressional section by section summary is available here.
  • A&B detailed summaries are below:
  • Congress has passed three coronavirus emergency response bills and the first two are below:
  • Bill 1.0: Coronavirus Preparedness and Response Supplemental (CPPRS) (R. 6074) passed on March 5
  • Bill 2.0: Families First Coronavirus Response Act (FFCRA) (R. 6201) passed on March 18

Transition to “Reopening”   

  • State/Other Actions
    • For the latest information on state reopening decisions, see A&B 50-State Openings tracker - updated in each A&B Coronavirus Flash. (Updated 5/31/20)
    • The Judicial Council of California (JCC) previously adopted 11 emergency rules related to COVID-19 pandemic, including Emergency Rule 9 that tolled the statutes of limitation for all civil action in CA from April 6 until 90 days after the governor declares the pandemic state of emergency lifted. On May 29 the JCC amended Emergency Rule 9 to create a new and shortened limitations period for statutes of limitations and the A&B Environment, Land Use & Natural Resources Group examines the impact of Emergency Rule 9 and what it applies to. (5/29/20) (New)
    • The Joint Commission released a statement that regular hospital certification and accreditation surveys would resume in June; however the process will incorporate new social distancing precautions. (5/27/20)
  • Administration Actions
    • The Department of Transportation has announced plans to distribute 15 million face coverings for transportation workers to assist with the transition to reopening. (5/28/20)
    • The Department of Veteran’s Affairs has announced it will resume in-person compensation and pension exams at select locations. (5/28/20)
    • The Department of Labor’s Occupational Safety and Health Administration (OSHA) has posted guidance social distancing best practices for workers as businesses transition to reopening. (5/28/20)
  • OSHA has released guidance and launched a webpage to provide COVID-19 related recommendations to reduce exposure for construction employers and workers. (5/27/20) CDC guidance for Construction workers (5/22/20)
    • The FDA has updated its information on their Enforcement Policy for Face Masks and Respirators During the Coronavirus Disease Public Health Emergency. This updated information is intended to help expand the availability of general use face masks for the general public and workplace. (5/28/20)
    • The CDC issued a new detailed report on its activities and initiatives that support the transition to reopening. (5/20/20)
  • The CDC updated or released guidance for reopening:

Federal Communications Commission   

  • The FCC approved another $18.22 million in telehealth applications. (5/28/20) (New)

Department of Health and Human Services   

  • The Department of Health and Human Services (HHS) Coronavirus toolkit page has been updated. (Updated 5/27/20)
  • HHS has a tracking feature that allows public viewing of all COVID-19 HHS grants and cooperative agreement awards on its website. The grants were distributed through programs in the ACF, ACL, ASPR, CDC, DHHS/OS, HRSA, IHS, NIH, and SAMHSA. (Updated 5/29/20)
  • The HHS Biomedical Advanced Research and Development Authority (BARDA) has updated its webpage to include a partnership on pharmaceutical manufacturing in America to expand capacity for active pharmaceutical ingredients and generic medicines needed during the COVID-19 pandemic. (5/29/20) (New)
  • The HHS Office of Assistant Secretary for Preparedness and Response (ASPR) has posted a Rural Health in COVID-19 Fact Sheet. (5/29/20) (New)
  • The HHS Office of the Inspector General (OIG) has released its Strategic Plan for Oversight of COVID-19 Response and Recovery. (5/26/20)
  • The HHS Office of the ASPR has released a fact sheet on the COVID-19 impact on the health care delivery system. (5/26/20)
  • HHS released a report to Congress on its COVID-19 Strategic Testing Plan as required by the Paycheck Protection Program and Health Care Enhancement Act. The report outlines 3 primary purposes for active testing: diagnostic testing, testing for contact tracing, and surveillance testing. (5/24/20)

Centers for Disease Control and Prevention  

Centers for Medicare & Medicaid Services  

  • The Centers for Medicare and Medicaid Services (CMS) latest news alerts. (Updated 5/29/20)
  • And for the latest COVID-19 related CMS guidance and FAQs visit the CMS Current Emergencies webpage. (Updated 5/27/20)
  • CMS has updated their COVID-19 FAQ on Medicare Fee-for-Service which includes all topics like billing for testing, treatment, and different types of settings. (5/28/20)
  • CMS has released Fact Sheet on Medicare, Medicaid, and CHIP payment methods for care provided at alternative testing sites under the direction of state and local governments and health care providers. (5/26/20)
  • CMS has announced that over 1,750 standalone Medicare Part D prescription drug plans and Medicare Advantage plans have applied to offer lower insulin costs through the Part D Senior Savings Model for the 2021 plan year. (5/26/20)
  • CMS has finalized requirements to increase access to telehealth for seniors in Medicare Advantage plans. (5/22/20)

HHS/CDC/CMS/HRSA CARES Act Provider Relief Funds   

  • The CDC has posted an updated dataset of provider recipient specific payment from the Provider Relief Fund general distribution high impact targeted allocation and/or rural targeted allocation. The dataset includes who has attested to receiving one or more payments and agreed to the terms and conditions as of May 29. $45.874 billion of the $72 billion allocated to these distribution pools has been attested to. (5/29/20) (New)
  • The CDC has also released a new dataset representing the list of health care entities who have agreed to the terms and conditions and received claims reimbursement for COVID-19 testing of uninsured individuals and/or treatment for uninsured individuals with a COVID-19 diagnosis, as of May 26. $2.08 million has been paid for treatment and $2.04 million has been paid for testing. (5/29/20) (New)
  • HHS - the CARES Act Provider Relief Fund (PRF) FAQs (Updated 5/29/20) have been updated and capture numerous modifications, including items of note outlined below (New):
    • HHS will not issue a new payment to a provider that received and then subsequently rejected and returned the original payment.
    • Specifically defines Executive Level II pay level ($197,300, exclusive of fringe benefits and indirect costs).
    • States “there is no direct ban under the CARES Act on accepting a payment from the Provider Relief Fund and other sources, so long as the payment from the Provider Relief Fund is used only for permissible purposes and the recipient complies with the Terms and Conditions” (i.e., not using the PRF payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse). This answer was provided in the context of whether a provider may receive a Paycheck Protection Program loan in addition to PRF payment.
    • Recoupment details per a new FAQ: HHS has not yet detailed how recoupment or repayment will work. However, the Terms and Conditions associated with payment require that the Recipient be able to certify, among other requirements, that it was eligible to receive the funds (e.g., provides or provided after January 31, 2020, diagnoses, testing, or care for individuals with possible or actual cases of COVID-19) and that the funds were used in accordance with allowable purposes (e.g., to prevent, prepare for, and respond to coronavirus). Additionally, recipients must submit all required reports as determined by the Secretary. Non-compliance with any Term or Condition is grounds for the Secretary to direct recoupment of some or all of the payments made. HHS will have significant anti-fraud monitoring of the funds distributed, and the Office of Inspector General will provide oversight as required in the CARES Act to ensure that Federal dollars are used appropriately.
    • Additional payments –
      • When a provider can expect to receive additional funds: HHS is working to process all providers’ submissions as quickly as possible… It is the Department’s intention to distribute relief funds as quickly as possible.
      • Removed information stating that additional payments should be distributed within 10 days of submission. Instead, HHS states that providers “will receive an email when your application is completed. You will receive a notification from HHS as to the final status of your application.”
    • Confusing information removed –
      • The following language was removed (from an FAQ added 5/20): Generally, if a provider anticipates that its COVID-related lost revenues or increased expenses will be materially less than the value of the Provider Relief Fund payment received, the provider should reject the entire General Distribution payment and submit the appropriate revenue documents through the General Distribution portal to facilitate HHS determining their correct payment.
      • The following language was removed (from an FAQ added 5/21): Generally, if a provider anticipates that its COVID-related lost revenues or increased expenses will be materially less than the value of the General Distribution payments received, the provider should reject the payment and submit its adjusted gross receipts in the Provider Relief Fund Payment  Portal.
    • High Impact Distributions –
      • HHS may make an additional distribution. HHS will announce any distribution in advance and give a deadline and method for providing updated data.
      • The April 10 cut-off date was used “to allow HHS to calculate and make payments in a fair, transparent, and timely manner based on submitted COVID-19 admissions data”
      • The 100 admissions threshold was used “as a proxy for the extent to which each facility experienced lost revenue and increased expenses associated with directly treating a substantial number of COVID-19 inpatient admissions”
    • SNF Distribution –
      • Payment: HHS will distribute $4.9 billion in additional funding (over and above General Distributions received) to more than 13,000 skilled nursing facilities. Eligible facilities range in size of between six and 1,389 beds. This represents a range of distributions between $65,000 and $3,255,500 and a national average distribution of ~$315,600 per facility. Each Skilled Nursing Facility received a fixed distribution per facility of $50,000 plus distribution of $2,500 per bed.
      • Payments will be dispersed electronically based on banking account information associated with the billing TIN. If the billing TIN does not have a bank routing number associated with it, “the organization will most likely receive a paper check.”
    • HHS has completely revised its Provider Relief Fund webpage. The new webpage posts, for the first time, the breakdown by recipient of the $50 billion in targeted distribution. (5/28/20)
    • The COVID-19 Provider Relief Fund – the A&B General Distribution Attestation and Application Process Guide has been updated. (Updated 5/27/20)
    • HHS released a statement extending the Provider Relief Fund attestation deadline for an additional 45 days. This allows providers 90 days from the date they received a payment to accept the Terms and Conditions or return the funds. (5/22/20)
    • HHS issued a statement notifying eligible providers that they have until June 3, 2020 to submit their additional revenue information for payments from the Provider Relief Fund $50 billion General Distribution. (5/20/20)
    • The CARES Provider Relief Fund hotline is (866) 569-3522.

Food and Drug Administration  

  • FDA provides a daily roundup on COVID-19 related actions. The latest announcements . (Updated 5/29/20)
    • FDA updated its FAQs on Testing for SARS-CoV-2, including posting a list of antibody tests that are being removed from the “notification list” of tests being offered. (Updated 5/30/20)
    • FDA maintains its COVID-19 FAQs for the general public. (Updated 5/29/20)
    • The agency also maintains a public database of drug shortages. (Updated 5/29/20)
  • The FDA has posted a voluntary EUA template for at-home sample collection kits. (5/29/20) (New)
  • The FDA has issued Emergency Use Authorization (EUA) for Stryker Sustainability Solutions VHP N95 Respirator Decontamination System. (5/27/20) (New)
  • The FDA has issued guidance entitled “Effects of the COVID-19 Public Health Emergency on Formal Meetings and User Fee Applications” to address questions on formal meetings with industry, user fee application goals and timelines, and the prioritization of application reviews during the public health emergency. (5/28/20)
  • The FDA issued two guidance documents to help address potential shortages of face masks, surgical masks, respirators, and face shields: Recommendations for Sponsors Requesting EUAs for Decontamination and Bioburden Reduction Systems for Face Masks and Respirators; and Enforcement Policy for Face Masks and Respirators. (5/27/20)
  • The FDA has issued a letter to health care providers to remind health care employers and personnel the correct sterilization cycle associated with certain models of the Advanced Sterilization Products (ASP) STERRAD Sterilization Systems and to only decontaminate compatible N95 or N95-equivalent respirators during the pandemic. (5/27/20)
  • The FDA has provided a SARS-CoV-2 reference panel tool to help with the development and evaluation of tests. (5/27/20)
  • The FDA issued an Emergency Use Authorization for the CLEWICU System for use in the intensive care unit (ICU) as a diagnostic aid to assist with the early identification of adult patients who are likely to be diagnosed with respiratory failure which is a common complication associated with COVID-19. (5/27/20)
  • The FDA issued guidance for FDA-regulated human food establishments – human food facilities and farms – to voluntarily notify the agency of temporary closures and significant reductions in operations and to request assistance during the pandemic. (5/27/20)
  • The FDA released an updated list of medical devices approved to treat COVID-19. (5/26/20)

Health Resources and Services Administration   

  • The Health Resources and Services Administration (HRSA) has awarded $15 million in COVID-19 assistance to 52 Tribes, Tribal organizations, urban Indian health organizations, and other services to Tribes in 20 states. The full list of COVID-19 Tribal award recipients is available here. (5/28/20)
  • HRSA provides COVID-19-related information, resources, and FAQs here. (Updated 5/27/20)

Department of Homeland Security/FEMA/DOD   

  • The Department of Homeland Security (DHS) posts a weekly roundup of its response to COVID-19. (Updated 5/25/20)
  • The Federal Emergency Management Administration (FEMA) has posted a state-by-state allocation list of PPE and other supplies. (5/29/20) (New)
  • The President announced his intent to extend the Title 32 orders through mid-August. Title 32 gives the governors authority to command their National Guard forces, while 100% federally funded, to meet emergency COVID-19 relief needs within their states. (5/28/20) (New)
  • FEMA announced suspension of rent collection for Butte County Camp Fire Survivors. (5/27/20)
  • FEMA announced a distribution of non-contact infrared thermometers to state and local governments to assist in reopening. (5/26/20)

Department of Justice/Federal Trade Commission/Litigation   

  • The Department of Justice maintains an anti-price gouging & anti-fraud webpage with information on reporting complaints and resources on prevention. (5/26/20) (New)

Department of Labor/OSHA   

  • The Department of Labor (DOL) Inspector General warned the Agency that the requirements for claiming the expanded unemployment benefits were lax and highly vulnerable to fraud. (5/26/20) (New)
  • The DOL announced dislocated worker grant awards totaling nearly $24 million for workforce programs in Pennsylvania, Michigan, Maine, and Washington. (5/27/20)

Small Business Administration   

  • Small Business Administration (SBA) – In response to the CARES Act requirements, the SBA Paycheck Protection Program (PPP) website has updated its FAQs for lenders and borrowers. (Updated 5/27/20)
  • The SBA released the Paycheck Protection Program Loan Forgiveness process, which includes the application and instructions. (5/15/20)
  • The SBA updated its total loan statistics, noting that it has approved 4.5 million loans, totaling $510 billion in loans through 5,513 participating lenders. (Updated 5/29/20)

Department of Treasury/IRS/Federal Reserve   

  • The Department of Treasury website for CARES Act business assistance programs.
  • The Department of Treasury has jointly announced with the SBA that $10 billion is being set aside of the Round 2 Paycheck Protection Program funding for use exclusively by Community Development Financial Institutions (CDFIs) to target relief to low-income communities. (5/28/20)
  • The Internal Revenue Service (IRS) released information and FAQs on the use of prepaid debit cards which are being sent to some taxpayers for their economic impact payments, rather than a paper check. (5/27/20)
  • The IRS announced a tax safe harbor for taxpayers developing renewable energy projects and producing electricity from wind, biomass, geothermal, landfill gas, trash, and hydropower. (5/27/20)
  • The IRS posted the latest state-by-state list of economic impact payments. (5/22/20)

Other Agencies   

  • The Department of Commerce Economic Development Administration has announced that applications would be accepted for competitive grant awards on a rolling basis to help communities prevent, prepare for, and respond to the pandemic. (5/27/20)
  • The Consumer Financial Protection Bureau (CFPB) issued two “no-action” letter templates (template) to help homeowners and consumers seeking small dollar loans and wishing to avoid foreclosure in the process. (5/22/20)
  • A&B attorneys provide analysis on how the CFPB is responding to consumer complaints about mortgage and credit card terms during the pandemic. (5/18/20)
  • The Department of Defense has announced it has signed a $2.2 million contract with Hollingsworth & Vose to increase the U.S. domestic production of N95 ventilator filters starting in August. (5/28/20)
  • For information on COVID-19 waste regulation and environmental compliance issues during the pandemic, read the A&B Environmental & Land Use Briefing. (5/22/20)

Trade and International Business Issues   COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle COVID-19: global supply chains to expect major reshuffle

  • President Trump released an order restricting nearly all travel from Brazil for non-U.S. citizens if they were in the country during the prior 14-day period. Green card holders, close relatives of U.S. citizens, and flight crew members are exempt. (5/24/20) Further detail provided in a DHS release. (5/27/20)

Insurance Issues   

  • For a 50-state review of business interruption insurance related issues see this new COVID-19 Insurance Litigation and Regulatory Issues tracker. The tracker is updated weekly. (Updated 5/31/20)
  • On May 26, U.S. Representative Carolyn Maloney (D-N.Y.) introduced R. 7011—the Pandemic Risk Insurance Act of 2020. The legislation would create the Pandemic Risk Reinsurance Program, providing “compensation for business interruption losses resulting from future pandemics or public health emergencies.” The bill would apply only to “covered public health emergenc[ies]” declared “on or after January 1, 2021.” (New)
  • On May 21, the National Association of Mutual Insurance Companies, jointly with other insurance industry trade associations, announced a proposal for a new federal program to assist businesses in the event of a future pandemic risk. The Business Continuity Protection Program would “provide revenue replacement assistance . . . following a presidential viral emergency declaration.” The program would be administered by the Federal Emergency Management Agency with assistance from private contractors.
  • Notable filings and orders include:
  • On May 28, Alissa’s Flowers, Inc., the owner and operator of a flower shop in Independence, Missouri, initiated a putative class action in federal court against its insurer State Farm Fire and Casualty. Plaintiff alleges that while the insurance industry has offered relief to auto policyholders in the form of reduced premiums, “insurers have not offered any sort of premium relief to businesses.” Plaintiff argues that businesses ought to have been extended premium relief for commercial liability insurance policies. Plaintiff alleges claims for breach of contract, unjust enrichment, and declaratory and injunctive relief and seeks to represent a nationwide class of similarly situated persons and entities. The case is Alissa’s Flowers, Inc. v. State Farm Fire and Cas. Co., No. 2:20-cv-04093-WJE (W.D. Mo.) (New)
  • On May 27, MTDB Corp. dba Striker Lanes, a bowling alley, initiated a putative class action in the Northern District of Illinois against its insurer, American Automobile Insurance Company. The Complaint seeks a declaratory judgment that plaintiff and the putative class “sustained direct physical loss or damage to property” as a result of SARS-CoV-2 or COVID-19, that SARS-CoV-2 and/or COVID-19 are covered causes of loss, and that plaintiffs and the class are therefore entitled to coverage. Plaintiff also alleges that they are entitled to coverage for losses resulting from certain governmental orders. Plaintiff seeks to represent a class of Illinois businesses insured under policies issued by defendant. The case is MTDB Corp. v. Am. Auto. Ins. Co., No. 1:20-cv-03127 (N.D. Ill). (New)
  • On May 26, U.S. Specialty Insurance Co. (“Specialty”) moved to dismiss a putative class action complaint filed by Egg Works, a Las Vegas breakfast restaurant chain. Specialty argues that Plaintiffs failed to allege facts that trigger coverage under Plaintiff’s Restaurant Recovery Insurance Policy. Specifically, Specialty asserts that Plaintiff’s Complaint fails to allege any facts showing that their claimed losses resulted from an enumerated Insured Event. The case is Egg & I, LLC et al. v. U.S. Specialty Ins. Co., et al., No. 2:20-cv-00747 (D. Nev.) (New)

For background and the most up-to-date information, please visit the Centers for Disease Control and Prevention Coronavirus Disease 2019 website: HERE. The additional federal agency links are provided by the White House Coronavirus Task Force:   What You Should Know:

Information for Businesses:

Information for Travel and Transportation:

Information for Healthcare Providers, First Responders, and Research Facilities:

Information for Community Events and Gatherings:

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